Condo Insurance: A General Guide for Buying

Condo insurance is a “must have” for condo owners, but just as there are differences in ownership of a condo, a town home and a single-family home, there are different insurance needs. The following can serve as a general buying guide for condo insurance.

Know Your Master Policy

When you own a condo, you own one unit in a complex. Your association dues pay for, among other things, a master insurance policy that covers the grounds, the building exteriors, liability for the common areas and more. But each master policy will differ with each complex and can affect your condo insurance policy needs.

  • What is covered? Some master policies cover to the walls of your unit but you are responsible for fixtures and additions. Some cover the fixtures and additions.
  • What is the deductible? The deductible is the amount you might be assessed to pay if your condo association files a claim on the master policy.
Either of these master policy terms can affect how much condo insurance you should have.

Knowing Your Needed Coverage

Once you know what you might be liable to replace in the case of fire, hurricane or other destructive event and you know the deductible you might be liable for, you need to calculate what it would cost you to rebuild uncovered items. Again, depending on your master policy, this could include cabinetry and flooring.

But in addition to these, you need to have coverage to replace your personal possessions such as clothes, electronics, and decorative items. This can run into tens of thousands of dollars. Be sure to have a good inventory of your personal possessions so that the claims process is made easier.

Are You Certain of Your Coverage

Often, condo projects are in areas where hazards such as flood and wind damage can cause real destruction. It is vital that you understand the terms and limits of the coverage of your condo insurance policy.

The master policy should have coverage for flood and wind damage. But is it enough if there is damage to your unit and are you certain it is there? Flood insurance is available through the government. Also, be aware that flood damage is different from water-backup damage. Make sure your condo insurance policy covers you for the right cause of damage.

Personal liability coverage is also a must and must be gauged to the liability coverage on the master policy. In most cases, you are responsible for accidents in your unit.

Money You Don’t Want to Save

You already know that the cheapest product you can buy is not always the best product for your particular need or circumstance. What is true in consumer goods is true in consumer services as well, and this goes for insurance.

It will do you no good to save on your monthly insurance payment, even if it is a substantial savings, if the company is unable to meet its obligations in the case of a major event.

Be certain that you are buying from a financially sound company. You don’t want to save money monthly if the coverage you need isn’t there in a crisis.

Shop The Market

All major property and casualty insurers offer condo insurance. Most have an online presence where you can get a quote and compare rates. Put the Internet to work for you buy comparing many firms in the marketplace and let competition do its work. If you are choosing among sound companies, find the best deal. But make absolutely certain that the coverage you are getting meets the needs of your personal circumstances.

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